Tuesday, November 25, 2008

Flashback: The Rhetorical Gap far Exceeds the Policy Gap

Before the election I blogged a couple of times (here and here) about how Democrats and Republicans talk so differently about public policy, but ultimately execute so similarly. My opinion on that matter never pleases anyone, and this election season was no different. Prior to Nov 5, Obama supporters insisted that "any idiot" ought to realize that a President Obama would bring fairness to the tax code, while a President McCain would cut taxes for the rich. At the same time, McCain supporters sternly warned me how commerce would be destroyed by a President Obama's tax-and-spend socialism.

I stuck to my guns and said that Obama exaggerates how much he'd change the tax code and McCain exaggerates how much he'd cut spending; my best guess is that they'd both do essentially the same thing. The main differences between the two, I said, would be with the kind of rhetoric used to serve up a single flavor of public policy, and the excuses rendered for not living up to the partisan promises. [although beside the point, I also opined that Obama's rhetoric would be more inspiring]

Well, the election and Obama's memorable victory was only three weeks ago. Inauguration hasn't even happened yet. Yet talk about tax code fairness ceased even before the Chicago Park District could sweep up the Obama-celebration debris on Nov 5. Today even the Obama team itself admits that it will stick with the tax code they inherit from Bush:

Barack Obama promised to repeal President George W. Bush's tax cuts for the wealthy ahead of their scheduled expiration in 2011. It was part of how Obama would pay for an overall net tax cut aimed at low- and middle-income taxpayers, and an effort to bring what he called "fairness" to the tax system.

No one is talking tax hikes now. Over the weekend, Obama said he has charged his new economic team with devising a plan that would create or preserve 2.5 million jobs over two years. He said the plan would include broad spending plans as well as the middle- and low-income tax cuts he described during the campaign. Aides later said the plan would not include any of the tax increases Obama, as a candidate, had said he would impose on taxpayers who make more than $250,000. Asked Monday when those hikes might go into effect, Obama said, "Whether that's done through repeal, or whether that's done because the Bush tax cuts are not renewed, is something that my economic team will be providing me a recommendation on." (read the full article by JIM KUHNHENN)

This is an inspiring way of saying "I kind of do things that Republicans would, and they would have done things kind of like I will." And that's good news for the economy.

Supply and Demand (in that order)

The basic tools of supply and demand help immensely to understand and predict everyday events in our world. These days, many of those events are related to the Redistribution Recession of 2008-9. But I also look at other issues related to fiscal policy, labor economics, and industrial organization.